Canadian Oils Gain on Expectation of Rising U.S. Refinery Demand
Canadian crudes strengthened on the spot market on the expectation of more demand as Midwest refineries return from maintenance and increase output for the North American summer driving season.
Exxon Mobil (XOM)’s Joliet, Illinois, refinery is expected to restart this month after maintenance that began in mid-April. BP Plc (BP/)’s Whiting, Indiana, plant is said to be planning to finish converting a crude unit to process heavy crude this month as well. The Joliet plant can process 238,000 barrels a day and Whiting 420,000.
Western Canada Select heavy oil for July delivery gained $1.65 to a discount of $14.50 a barrel against U.S. benchmark West Texas Intermediate oil, according to Calgary oil broker Net Energy Inc. It’s the narrowest discount since April 15, according to data compiled by Bloomberg.
Syncrude, a light crude from oil-sands bitumen processed in an upgrader, gained $2.65 to a $4.25 premium, Net Energy said. It was the highest premium since .
U.S. refinery utilization rates increased by 2 percentage points to 88.4 percent last week, according to a report yesterday by the Energy Information Administration. Refinery fuel production typically increases at the start of the U.S. summer driving season on Memorial Day, which fell on May 27 this year.
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